Vida y predicación de los doce (la Iglesia) 1 La predicación de los doce

Family culture is still an evolving research area with a dearth of literature in the field of family business. Organisational culture, on the other hand, has been the toast of academic enquiry, especially within the field of management because of its link to the survival of firms. In both entrepreneurship and management literatures, organisational culture is posited as an important strategic resource for firms to gain competitive advantage (Zahra et al., 2004; Dyer, 1988). This is backed by empirical researches which produce positive outcomes while investigating the association between organisational culture and superior firm performance (Barney, 1996).

Culture was described by Hofstede and Hofstede (2005) as the software of the mind. According to these authors, culture is a collective phenomenon which is shared with people within the same social environment (Hofstede and Hofstede 2005). At the national level, culture is made up of the underlying value systems that are specific to a society which prompts individuals within that society to behave in

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certain ways (Hofstede, 1994). Within an organisation, culture is explained as the coherent patterns of beliefs and values that represent acceptable solutions to major organisational problems (Zahra et al., 2004). At the family level, culture refers to a cumulative set of assumptions that a family holds which guide their belief systems (Dyer, 1988). In this thesis, the focus is on culture at the family level due to the dearth of literature on same.

Why study culture at the family level? The family is the smallest unit of a society (Enrique et. al., 2007). It is a traditional system that is guided by values, myths, norms, beliefs and attitudes (Lumpkin et al., 2008). The family is the most important social institution of a society because it shapes people from birth. These people make up the society. They work in or start up enterprises (organisational culture) and eventually shape the culture of a nation (national culture). Family culture sheds light on certain aspects of culture such as values (Koiranen, 2002), which are considered to be the core of culture (Hofstede and Hofstede, 2005). Values answer the question of what is important to one; and core values are the deep-seated pervasive standards that influence almost every aspect of one’s life (one’s moral judgements, responses to others, commitments to personal and organisational goals (Dumas and Blodgett, 1999:210).

The central assumption in this thesis is that when a family gets involved with a firm, there is a possibility that the business would be guided by the same principles, and values embedded in the family (Zahra et al., 2004). Therefore, attempts to understand family core culture as represented in their values and how these influence the performance of family firms will be an important contribution to the theory of family firms.

Nigeria, this research study location, is a country of diverse ethnic groups and cultures (Mbakogu, 2002). The three dominant ethnic groups in Nigeria are Yoruba, Igbo and Hausa-Fulani, while the other ethnic groups are classified as the minority group. Ethnic groups are defined as a group with a common identity that distinguishes them from others (Ukoha, 2005). Cultural practices differ in e a c h ethnic group in Nigeria. However, these cultural practices are mainly made up of symbols, rituals and heroes as described by Hofstede and Hofstede (2005). Values, the core tenet of culture which captures basic human behaviour,

knowledge, commitment (Aronoff and Ward, 1995) may also differ among the different groups in Nigeria. The national culture of Nigeria relevant to this study that was described by Hofstede and Hofstede (2005) are as follows:

 Large Power Distance: In large-power distance societies, power is based on tradition or family, charisma and the ability to use force.

 Collectivism: In collectivist societies, opinions are predetermined by group membership, and collectivist interests prevail over individual interests. Harmony and consensus in the society are considered to be paramount. The extended family system which is peculiar to African societies depicts their collectivist nature. The extended family is a combination of two or more nuclear families in which their relationship is biological, social and economical (Nafziger, 1969). Resources are usually pulled together for the benefit of all (and not for the benefit of one).  Masculinity: Nigeria was ranked as being in between these two cultural traits

(masculinity and femininity) but more towards masculinity. In masculine societies, challenge, earnings, recognition and advancement are important. Men are expected to be ambitious, assertive and tough while women are supposed to be tender and take care of responsibilities. Gender inequality is high in such societies. Recent statistical figures and empirical evidences from Nigeria suggest that the country is still plagued with a high level of gender inequality across all levels, from family to national (British Council Nigeria, 2012).

 Short-term Orientation: The findings recorded in the book by Hofstede and Hofstede (2005) rank Nigeria as a country with short-term orientation. In their book, short term orientation is defined as the fostering of virtues related to the past, present and in particular, respect for tradition, preservation of face and fulfilling of social obligations.

The description by Hofstede and Hofstede (2005) above is of Nigeria’s national culture, very little is known about family culture (values) in the major ethnic groups. The information available is mainly descriptions of cultural practices and not on values.

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Yoruba Ethnic Group: The Yorubas are one of the most interesting and important people in the African continent (Bascom, 1984). They are located in the south- western part of Nigeria which is spread across six states, Ondo, Ogun, Oyo, Osun, Ekiti and Lagos (the largest commercial centre in Nigeria and Africa). The Yorubas are also found in some parts in Kwara and Edo States. The Yoruba people are known for their rich cultural practices which are reflected in their music, arts, dressing and philosophy (Bascom, 1969). They use proverbs and adages in their everyday communication. History records that the two major religions (Christianity and Islam) were welcomed with open arms by the Yorubas. This confirms their warm nature and their disposition to change (Ogunyemi, 2003). They are very good in education, management and business. Polygamy, which is the marrying of more than one wife by a man, was very common among this ethnic group in the past because marrying of one wife was seen as a sign of weakness then. The extended family system is also very strong in the Yoruba culture; they believe that it is the responsibility of the whole village to raise a child.

Igbo Ethnic Group: They are located in the south-eastern part of Nigeria and can be found in five states, namely Abia, Anambra, Ebonyi, Enugu and Imo. The Igbos are known for their trading activities which are spread across the six geopolitical zones of the country. They share distinct cultural practices which reflect in their belief system, music, dance, religion, art, cuisine and language dialects. Christianity was also very well received by the Igbos. However, some of them still practise traditional religion till date. The extended family system is also a strong part of the Igbo ethnic group (Ekeopara, 2012). Igbos as an ethnic group are considered to be achievement driven, energetic and industrious (Aluko, 2003).

Hausa Ethnic Group: The Hausas are located in the northern part of Nigeria, a distinctively different zone from southern Nigeria. They have the largest size landmarks and population in Nigeria (Population Council, 2007). The Hausa can be found in nineteen states (Kaduna, Kastina, Niger, Sokoto, Kebbi, Zamfara, Bauchi, Gombe, Borno, Yobe, Adamawa, Taraba, Jigawa, Kwara Kogi, Nasarawa, Plateau, the Federal Capital Territory (FCT, which is the Capital of Nigeria), and Kano (the largest province in the north in terms

of population and economy). The culture in the North is such that compliance to a higher authority is very high. The Hausas play an important part in Nigerian politics, and most rural dwellers are active in farming and cattle rearing. Northern Nigeria is very symbolic with the history of Islam in Africa, south of Sahara and in particular, Nigeria. Islam came into Northern Nigeria through the Kanem-Borno Empire in the 11th century before spreading to other parts of the North.

The F-PEC Culture sub-scale developed by Astrachan et al. (2002) is adopted in this thesis to empirically assess family culture in Nigerian family firms. The F-PEC Culture subscale is developed to measure individual family values, commitment and the overlap between family and business values.

Tables 2.5 and 2.6 below give a brief summary of the six dimensions of family involvement (ownership, management, governance, succession, family employee and family culture) identified through a critical review of literature. Their relationship with previous seminal works on family involvement (FI) in literature is also discussed. The consolidation of existing conceptual models, empirical researches and theoretical concepts aids the identification of these key dimensions that are fundamental to defining family business in a new research context. These six dimensions are fundamental to understanding the nature, behaviour and essence of family involvement in a business. Therefore, given the importance accorded to these six FI dimensions in previous researches carried out in different countries (reviewed in this thesis and summarised in tables 2.5, 2.6 and appendix 1), this thesis is proposing an inclusive definition for family business that is both operational and measurable.

A family business is defined as a business that is family-owned, family-managed, family-governed, that has the intention for the business to remain in the family (succession plans), with a presence of family employees, and exhibits significant level of family culture – INCLUSIVE DEFINITION

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Table 2.5: The Six Dimensions of Family Involvement (FI)

DIMENSION DEFINITION MEASUREMENTS

Ownership Ownership dimension is present when the highest percentage of shareholding is held (directly or indirectly) by a dominant family related by blood or marriage (Astrachan et al., 2002; Demesetz and Villalonga, 2001; Westhead and Cowling, 1998).

The ownership dimension will be measured by the shares held directly or indirectly in the business by the largest single or dominant family related by blood or marriage (Astrachan et al., 2002; Westhead and Cowling, 1998).

Management A family-managed company is defined as a business in which a family descent is acting as the Chief Executive Officer of the company (Miller and Le Breton-Miller, 2006). In addition to this, if a management team is present within the business, the single largest or dominant family occupies a significant proportion of same.

Number of family members involved with managing the business; or in the absence of a management team, a business would be considered as family managed if the Chief Executive Officer is a member of the largest single or dominant family.

Governance & Control Governance is defined as the organisation of strategic leadership and control of the business by the dominant family (Klein, 2010). This definition captures the following four governance roles performed by the family control, strategy, service and resource- dependent (Heuvel et al., 2006)

Governance dimension will be measured by the number of the dominant family members present in the board of directors; or presiding over family councils, family meetings, or other family institutions, responsible for carrying out the following governance roles within the business: control (resources, authority, enforcing discipline); strategy (decision making); service (providing counselling, advice, mentoring); and resource-dependent (providing access to capital and network, use of goodwill by the firm) – (Heuvel et al., 2006; Suaré and Santana- Martin, 2004).

Succession Succession is defined as the process through which a firm is transferred from one generation to another (Morris et al., 1997)

The number of generations involved in the business. The F-PEC- Experience subscale will be the underlying measuring scale for this dimension (Astrachan et al., 2002).

Family Employees Family employees represents family members (both nuclear and extended) who are employees occupying different positions within the family business

Number of family employees (both nuclear and extended) employed by the business

Family Culture Family culture and values represents beliefs within the family system which dictates their attitude, influences their perception about issues and programs individual behaviour (Bertrand and Schoar, 2006; Lee and Peterson, 2000).

The F PEC – Culture subscale will be used to measure family culture in this thesis. Particular attention will be paid to the following: how often family meetings hold; how easily decisions are reached; commitments; conflict.

Relationship between the Six Dimensions of Family Involvement used in this study and Existing Definitions in the Family Business Literature

Dimensions of Family Involvement

Definitions used in this Study

Linkage to existing definitions of family involvement 2 &

Models

3-Circle *SFB Model Familiness Bull’s Eye Model Westhead &

Cowling (1998)

Chua, Chrisman & Sharma (1999)

F-PEC Scale

Ownership Ownership dimension is present when the highest percentage of shareholding is held by a dominant family related by blood or marriage (Astrachan et.al., 2002; Demesetz & Villalonga, 2001; Westhead & Cowling, 1998)

The 3-Circle Model introduced the ownership dimension into the overlapping model framework. This model provided an important insight to the importance of ownership in the synergy between two systems (family and business) The SFB model established the uniqueness of the family and how it interacts with the firm across all the six dimensions. The principle of closure in the familiness concept Identifies with ‘ownership’.

The Bull Eye’s narrow definition highlights the importance of the ownership dimension The ownership element identified by Westhead & Cowling (1998) correlates with the ownership dimension employed in this thesis.

Chua et al., (1999)’s

definition did not give specific recognition to the ownership dimension. The Power subscale of the F-PEC identified strongly with the ownership dimension. Management dependent al., 2006) (Heuvel et Succession Succession is defined as

the process through which a firm is transferred from one generation to another (Morris et al., 1997)

No correlation

specific The SFB model established the uniqueness of the family and how it interacts with the firm across all the six dimensions.

The principle of time in the familiness construct identifies with ‘succession dimension’.

The Bull Eye’s narrow definition captures the succession dimension significantly. The generational ownership correlates succession dimension inter- transfer with Chua et al., (1999)’s definition identifies significantly with the succession dimension. The Experience sub-scale of the F-PEC scale identifies strongly with the succession dimension Family Employees Family employees represents family members (both nuclear and extended) who are employees occupying different positions within the family business

The 2 & 3 – Circle Models identifies significantly with the presence of family employees in FB and also fundamentally to its definition The SFB model established the uniqueness of the family and how it interacts with the firm across all the six dimensions. The principle of interaction in the familiness construct highlights the importance of family employees as a source of social capital for the family business

The Bull Eye’s narrow definition highlights the important roles of family e m p l o y e e s in the day-to-day running of a FB. No correlation. specific No correlation

specific The Experience sub-scale of the F-PEC identifies the important contribution of individual family members to a family business Family Culture These are beliefs within

the family s y s t e m , which dictates the attitude of the family towards the business and also influences their perception of issues. They also programme the behaviour of the family and business.

No correlation

specific The SFB model established the uniqueness of the family and how it interacts with the firm across all the six dimensions. The principles of ‘time’ and ‘interdependence’ establishes the importance of family culture and values to the uniqueness and definition of family business No correlation. specific No correlation. specific No correlation

specific The culture sub- scale of the F- PEC scale is fundamental to the

identification of the critical role- family culture occupies in defining FB. A family-managed company is defined as a business in which a family descent is acting as the Chief Executive Officer of the company (Miller and Le Breton- Miller, 2006). In addition to this, if a management team is present within the business, the single largest or dominant family occupies a significant proportion of same. No correlation

specific The SFB model established the uniqueness of the family and how it interacts with the firm across all the six dimensions.

The principle of closure in the familiness construct identifies with the management

dimension

The Bull Eye’s middle and narrow definitions capture the importance of the family u n d e r the ‘management dimension’. The management element identified by Westhead and Cowling (1998) correlates with the management dimension

Chua et al., (1999)’s

definition identifies with the management dimension.

The Power sub- scale of the F- PEC identifies strongly with the management dimension

Governance Governance is defined as the organisation of strategic leadership and control of the business by the dominant family (Klein, 2010). This definition captures the four governance roles performed by the family: control, strategy, service and resource-

No correlation

specific The SFB model established the uniqueness of the family and how it interacts with the firm across all the six dimensions.

No relationship.

specific The Bull Eye’s broad definition of *FB highlights the importance of control in a family business. No correlation.

specific Chua et al., (1999)’s

definition identifies with the governance dimension.

The Power sub- scale of the F- PEC identifies strongly with the governance dimension

Developed for this thesis, 2011: *SFB Model: Sustainable Family Business Model;

*FB: Family Business; *CEO: Chief Executive Officer

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The combination of the six dimensions in the inclusive definition may be subjective (depending on the researcher’s discipline, research location) but three key dimensions must be included. These are family ownership, family governance and family culture. This is due to the power and legitimacy that these dimensions would give to the dominant family involved in the business. When a business is mainly owned, governed/controlled by a dominant family or coalition of families and has a significant level of family culture, then the family can play a dominant role in directing the future and behaviour of the firm. Family ownership and governance ensure strategic leadership (Arregle et al., 2007), while the presence of family culture confirms the influence of the family on the firm’s goals and general behaviour. Family ownership, family governance and family culture therefore provide the required platform for a family to take decisions and promote certain behaviours that cannot be reproduced in non-family firms. Consequently, based on the explanation given above, a family business can be identified in any research location when the firm has dominant family ownership, governance/control and culture. However, the remaining three dimensions (family management, succession, and family employee) can be included, depending on the research context.

This thesis’ proposed definition of family business differs from Chua, Chrisman and Sharma’s (1999) widely used definition in the following ways:

 In this thesis’ definition, strong emphasis is placed on the family’s majority ownership and governance and the presence of family culture. This is because evidence from empirical researches and conceptual papers from different research fields suggest that family ownership and control is very fundamental to the existence of family firms (European Commission, 2009; Anderson et.al. 2005). Moreover, findings from some empirical studies indicate that when a business is family owned and governed, the family would automatically have a strong presence in management.

 The study by Chua et al. (1999) suggests that four out of the six dimensions (ownership, management, governance and succession) highlighted above represent only components of family involvement in a business. According to them, these dimensions do not reflect the essence of family involvement so, they do not capture a sound theoretical definition of family business. However, this thesis shares a contrary view because dominant family ownership and governance has been associated with strong commitment and intention to maintain continuity of the business (Chrisman et al., 2010). In addition, Chrisman, Chua